----------------------------------------------------------------------------
AN ACT concerning finance charges on consumer credit sales; amending
K.S.A. 16a-2-201 and 16a-2-202 and repealing the existing sections.
Be it enacted by the Legislature of the State of Kansas:
Section 1. K.S.A. 16a-2-201 is hereby amended to read as follows:
16a-2-201. (1) With respect to a consumer credit sale, other than a sale
pursuant to open end credit, a seller may contract for and receive a fi-
nance charge not exceeding that permitted by this section.
(2) The finance charge, calculated according to the actuarial method,
may not exceed the equivalent of the following:
The total of:
(a) Twenty-one percent per year on that part of the unpaid balance
of the amount financed which is $1,000 or less;
(b) fourteen and forty-five hundredths percent per year on that part
of the unpaid balance of the amount financed which is more than $1,000.
(3) This section does not limit or restrict the manner of calculating
the finance charge whether by way of add-on, discount, or otherwise, so
long as the rate of the finance charge does not exceed that permitted by
this section.
(4) For the purposes of this section, the term of a sale agreement
commences with the date the credit is granted or, if goods are delivered
or services performed 10 days or more after that date, with the date of
commencement of delivery or performance.
(5) Subject to classifications and differentiations the seller may rea-
sonably establish, the seller may make the same finance charge on all
amounts financed within a specified range. A finance charge so made
does not violate subsection (2) if:
(a) When applied to the median amount within each range, it does
not exceed the maximum permitted by subsection (2); and
(b) when applied to the lowest amount within each range, it does not
produce a rate of finance charge exceeding the rate calculated according
to paragraph (a) by more than 8% of the rate calculated according to
paragraph (a).
(6) Notwithstanding subsection (2), the seller may contract for and
receive a minimum finance charge of not more than $5 when the amount
financed does not exceed $75, or not more than $7.50 when the amount
financed exceeds $75.
(7) As an alternative to the rates set forth in subsection (2), the sellermay contract for and receive a finance charge not exceeding 18% per yearon the unpaid balances of the amount financed Notwithstanding anyother provision of this section, with respect to a consumer credit sale otherthan open end credit, the seller may contract for and receive a financecharge not exceeding that agreed to by the consumer.
Sec. 2. K.S.A. 16a-2-202 is hereby amended to read as follows: 16a-
2-202. (1) With respect to a consumer credit sale made pursuant to open
end credit, the parties to the sale may contract for the payment by the
buyer of a finance charge not exceeding that permitted in this section.
(2) A charge may be made in each billing cycle which is a percentage
of an amount no greater than:
(a) The average daily balance of the account, which is the sum of the
actual amounts outstanding each day during the billing cycle divided by
the number of days in the cycle;
(b) the unpaid balance of the account on the last day of the billing
cycle; or
(c) the median amount within a specified range within which the
average daily balance of the account or the unpaid balance of the account
on the last day of the billing cycle is included. A charge may be made
pursuant to this paragraph only if the seller, subject to classifications and
differentiations the seller may reasonably establish, makes the same
charge on all balances within the specified range and if the percentage
when applied to the median amount within the range does not produce
a charge exceeding the charge resulting from applying that percentage to
the lowest amount within the range by more than 8% of the charge on
the median amount.
(3) If the billing cycle is monthly, the charge may not exceed 1.75%of that part of the amount pursuant to subsection (2) which is $1,000 orless and 1.2% on that part of this amount which is more than $1,000. Ifthe billing cycle is not monthly, the maximum charge is that percentagewhich bears the same relation to the applicable monthly percentage asthe number of days in the billing cycle bears to 30. For the purposes ofthis section, a variation of not more than four days from month to monthis ``the last day of the billing cycle.'' With respect to a consumer creditsale made pursuant to open end credit, the parties may contract for andthe seller or holder may receive a finance charge in an amount not ex-ceeding the rate or rates specified in the agreement governing the account.
(4) Notwithstanding subsection (3), if there is an unpaid balance on
the date as of which the credit service charge is applied, the seller may
contract for and receive a charge not exceeding $.50 if the billing cycle
is monthly or longer, or the pro rata part of $.50 which bears the same
relation to $.50 as the number of days in the billing cycle bears to 30 if
the billing cycle is shorter than monthly.
(5) As an alternative to the rates set forth in subsection (3), the partiesto the sale may contract for and the seller may receive a finance chargenot exceeding 18% per year on the amount determined pursuant to sub-section (2).
Sec. 3. K.S.A. 16a-2-201 and 16a-2-202 are hereby repealed.
Sec. 4. This act shall take effect and be in force from and after its
publication in the statute book.